Pratt aims to rehire laid-off workers in North Berwick

Sunday

Jun 6, 2010 at 3:15 AM

By JASON CLAFFEYjclaffey@fosters.com

NORTH BERWICK, Maine — Jet engine maker Pratt & Whitney plans to expand its local workforce over the next several years, the first time the company is doing so since the recession sent the aviation industry into a tailspin, according to General Manager Peter Borgel.

The initial increase will be small. About 10 employees who were laid off during the recession will be rehired — but it's an important first step in Borgel's plan to get the workforce back to its prerecession level of 1,500 by 2015, he said.

There are 1,286 workers now employed at Pratt, one of the largest companies in the region. Borgel said the facility pumps $300 million into the local economy.

But his plan faces an obstacle, he said in an interview this week.

Federal lawmakers are poised to continue funding a rival engine to one Pratt makes for the next-generation F-35 Joint Strike Fighter, a multirole stealth aircraft that will be used by several branches of the military.

The company is banking on the workload from manufacturing that engine to make up for the cancellation of the F-22 Raptor, which it also makes parts for. Congress killed that fighter after President Obama promised to stop paying for "Cold War-era weapons systems that we don't use."

The U.S. military has committed to buying close to 2,500 F-35s that will become the backbone of its fighter jet fleet. Eight other countries purchased smaller orders. It is the largest weapons program ever, but aims to cut costs through sharing variants of a single aircraft among branches of the military and the nation's allies, so the Navy and Air Force, for example, don't need separate aircraft development programs. Many parts also will be the same between each service's aircraft.

However, for a variety of reasons, including rising steel and other resource costs as well as procurement delays, each plane's overall cost has doubled to $113 million during the program.

Pratt was awarded the right to manufacture engines for all F-35s ordered so far, at a projected overall cost of $100 billion for the batch.

General Electric and Rolls-Royce, however, have teamed up to build a rival engine for the F-35. They hope to sell it when more jets are ordered by the U.S. and others.

Lawmakers initially appropriated close to $3 billion to develop the rival engine, and last month the U.S. House approved another $485 million. GE and Rolls have said they are more than 75 percent done with development.

If they complete the engine and the U.S. military or other countries chooses it over Pratt's, the workload at Borgel's North Berwick plant could decrease.

Aside from the potential impact on jobs, Borgel said it's a waste to pay for multiple engines.

He said the U.S. military and eight other countries already will have systems in place to manage the installation and maintenance of Pratt's engine when they get the first batch of combat-ready F-35s in the coming years.

"You would never break even for the extra expense of two logistical systems — tooling, training, and everything else you would have to do," he said. "You would have to double up everything. It's absolutely more expensive."

"There's no economic argument you can make."

Pratt's engine is at least five years ahead of its rivals in terms of development, Borgel said.

He rejected claims by GE and Rolls that competition would drive down costs and a malfunction in the Pratt engines could lead to a fleetwide shutdown.

Rep. Chellie Pingree, D-Maine, tried to cut funding for the rival engine, but fellow House members voted it down.

""We appreciate her looking after the interests of the 1,300 people here," Borgel said.

Support for the GE/Rolls engine was drummed up by Reps. Mike Pence, R-Indiana, and John Boehner, R-Ohio. Rolls has a manufacturing plant in Indianapolis, Ind., while GE Aviation is headquartered in Cincinnati, Ohio.

Borgel argued more jobs will be sent overseas if GE and British-based Rolls sell their engine.

"We all have suppliers that are global," he said. "But there's a larger percentage with Rolls-Royce ... A good portion of the alternative engine would be procured offshore as opposed to domestically."

Borgel said those jobs need to stay in the U.S.

Most of his workers — 85 percent — live in Maine, while about 15 percent live in New Hampshire. A handful hail from Massachusetts. There are 10 college students working as interns.

The company's 2009 payroll was $78 million, and it contributes $92,000 in annual community gifts. Pratt represents 20 percent of North Berwick's tax base.

The company's workload is split evenly between military and commercial orders. One commercial engine it makes parts for is the "Geared Turbofan," which the company touts as the most advanced of its kind in the world. It is courting Boeing and Airbus as potential buyers.